II. Who may transfer. The 46 Geo. 3. c. 135. s. 1. contains a provision, giving effect to all payments and contracts bonâ fide entered into with the bankrupt, more than two calendar months before the date of the commission, though made after a secret act of bankruptcy, provided the party had not notice of the prior act of bankruptcy, or that the bankrupt was insolvent or had stopped payment. Under this statute it is clear, that any indorsement or transfer of a bill or note, made after a secret act of bankruptcy, upwards of two months before the date of the commission, will be valid, provided the party in whose favour it were made had no notice of such act of bankruptcy or general insolvency. If a bill be indorsed by a bankrupt to a particular creditor, by way of fraudulent preference, even before an act of bankruptcy, it will be invalid. The rule upon this subject is, that if the preference is not the mere voluntary act of the party, but only consequential, as it is called, as where the act is done in the ordinary course of business, and upon the application of the creditor, or in pursuance of some prior agreement, which was not made in contemplation of bankruptcy, or were done to deliver the party from legal process, or from the threat and apprehension of it, or even from the pressure or importunity of the creditor, then it will not be void, though made the very moment before an act of bankruptcy committed. And where the preference is consequential merely, the creditors' or bankrupts' own knowledge or apprehension of his insolvency, is immaterial, that being frequently the very reason of the creditor's taking such measures by such bankrupt, or that he was insolvent, or had stopped payment." It was contended on the part of the defendant, that the plaintiff, at the time when the indorsement was made, had notice that J. S. was insolvent. The fact was, that before then J. S. had renewed his bills with the plaintiff, and that the bill in question was given in exchange for others which J. S. could not satisfy when due. But Lord Ellenborough held, that the insolvency mentioned in the statute, must mean a general inability in the bankrupt to answer his engagements, which was not to be inferred from his renewing bills of exchange in a particular instance; and the plaintiff had a verdict. See ante, 153, 4, in notes. transfer. against the bankrupt as are precisely the ground of II. Who may justifying the act done by the bankrupt, in consequence of it. A trader cannot, in contemplation of bankruptcy, indorse a bill or note to his creditor, of his own accord, and without any application. But it is not sufficient to avoid the transaction, that the indorsement was made voluntarily, and that an act of bankruptcy ensues, it must also appear that he had the act of bankruptcy in contemplation at the time when the indorsement was made. Nor has it ever been held, that if a creditor press for payment of his debt, and thereby obtain a transfer of a bill or note to him, that the intention of the bankrupt shall be called in aid to set it aside. If it were transferred through the urgency of the demand, or through the fear of prosecu→ tion, whatever may have been in the contemplation of the bankrupt, this will not vitiate the proceeding. Nor will the transaction, if bonâ fide, and not colourable, be impeached by the secrecy adopted in the transaction by the trader, to save his own credit in the view of the world. And where a trader, in contemplation of bankruptcy, and without solicitation, put three checks into the hands of his clerk, to be delivered to a creditor at the counting-house of the latter, but before they were delivered, the creditor called at the trader's, and demanded payment of his debt, upon which the checks were delivered to him, it was held that the intention to give a voluntary preference not being consummated, the delivery of the checks was valid 3. So where a creditor obtained a preference in contemplation of an intended deed of composition, and which preference would have been void as against the creditors under that deed, yet as the composition went off, it was decided, that the creditor might hold his 'See the rule and cases upon this subject in Smith v. Payne, 6 T. R. 152-Hartshorn t. Slodder, 2 Bos. & Pul, 589.-Crosby v. Crouch, 11 East. 256.-Cullen, 280, 1. * Crosby v. Crouch, 11 East. 256. II. Who may transfer. securities against the assignees under a commission of bankrupt subsequently issued, but not contemplated at the time of the preference'. So there are cases in which a trader in insolvent circumstances may return bills of exchange to the party from whom he has received them, though they would otherwise become the property of his assignees. If a promissory note be given to an uncertificated bankrupt, after the commission issued, and the assignees require the maker to pay them, the right to the note is thereby vested in the assignees, and an action cannot be supported by the bankrupt, unless indeed he acquired the note in respect of a contract made in his favour by the assignees or with their con currence 4. In case of the bankruptcy of a banker, bills deposited with him as agent, to obtain payment, do not pass to the assignees, unless the banker has discounted them, or advanced money upon the credit of them, in which case the assignees acquire the entire property in them if discounted, or have a lien on them pro 'Wheelwright v. Jackson, 5 Taunt. 109. 633. S. C. Graff and others, assignees, &c. v. Greffulke, 1 Campb. 89. If a trader, on receiving bills of exchange from one of his creditors abroad, to whom he is indebted beyond the amount of them, after becoming insolvent, but before committing an act of bankruptcy delivers these bills with the consent of his other creditors, to an agent of the person who had remitted them for the use of the latter, if he should be ultimately entitled to them; this is a legal and valid transaction, and if a commission of bankrupt afterwards issue against the trader, his assignees cannot maintain an action against the trustee to recover the produce of the bills. Gladstone v. Hadwen, 1 M. & S. 517. Where S. obtained bills of exchange from the defendant upon a fraudulent representation, that a security given by him to the defendant (which was void) was an ample security, and on the next day having resolved to stop payment, informed the defendant that he had repented of what he had done, and had sent express to stop the bills and would return them, and three days afterwards committed an act of bankruptcy, after which he returned to the defendant all the bills (except one which had been discounted) and also two bank notes, part of the proceeds of such discount; and the defendant delivered back the security, and afterwards a commission of bankruptcy issued against S. the assignees, under which commission, brought trover against the defendant for the bills and bank notes. Held that the defendant was entitled to retain them. 3 Kitchen v. Bartsch, 7 East. 53.-Smith's Rep. 58. S. C. *Coles v. Barrow, 4 Tannt. 754.-Holt C. N. P. 174. transfer. tanto in case of a partial advance. But the effect of 11. Who may bankruptcy upon the property in bills, in the hands of the trader, will be more fully considered in the chapter relating to bankruptcy. On the death of the holder, the right of transfer is vested in his executor or administrator'. If the executor or administrator indorse the bill or note, without qualification, he would be personally liable in case the bill should be dishonoured. Executors are not personally liable in case of the failure of a banker, in whose hands they have deposited bills, part of the estate. If a bill has been made or transferred to several persons not in partnership, the right of transfer is in all collectively, and not in any individually; but where several persons are in partnership, the transfer may be made by the indorsement of one partner only, in which case the transfer is considered as made by all the persons entitled to make it. And it has been held, that though such persons may not be in partnership, and only one has indorsed, yet that if the drawee accepted after the indorsement, he cannot dispute the 'Per Lord Ellenborough, in Giles v. Perkins, 9 East. 14.-Carstairs v. Bates, 3 Campb. 301.; and see Parr v. Eliason, 1 East. 544. and cases there cited; and sce 1 Bos. & Pul. 83, n. a.; and see 1 Mont, 354, 5, &c. Rawlinson v. Stone, 3 Wils. 1.-2 Stra. 1260.-Barnes, 164. S. C. A note was payable to A. B. or order; A. B. died intestate, and his administrator indorsed it to the plaintiff. These facts appearing upon the declaration, the defendant demurred, and contended that the personal representative of the payee had no power to indorse a note, but the Court of Common Pleas, after three arguments, and the Court of King's Bench, upon error brought, were unanimously of opinion that he had, and each court said it was every day's practice, and the constant usage for executors and administrators to indorse bills and notes payable to the order of their testators or intestates. 3 King v. Thom, 1 T. R. 487.-Gibson v. Minet, 1 Hen. Bla. 622.→ Bayl. 62. The court held, that upon a bill payable to several as executors, they might sue as executors; and per Buller, J. no inconvenience can arise from their indorsing the bill; for if they indorse, they are liable personally, and not as executors; for their indorsement would not give an action against the effects of the testator. *Rowth v. Howell, 3 Ves. jun. 565, 6.—Ante, 37. 5 Bayl. 55.--Carvick v. Vickery, Dougl. 653. (n). ante, 49. and Jones v. Radford, 1 Campb. 83. and see Williams v. Thomas, 6 Esp. Rep. 18.-Ante, 46.--Sel. Ni. Pri, 4th ed. 337. Ante, 39, 40. 160 II. Who may transfer. III. The time when a transfer may be made. regularity of the latter. In general we have seen that one partner may, without the express concurrence of the other partners, make a valid transfer of a bill, even in fraud of his co-partners 2. In the case of a bill payable to A. for the use of B., the right of transfer is only in A. because B. has only an equitable and not a legal interest 3. Indorsements of bills are most usually made after acceptance, and before payment; but though the term transfer," like the term "acceptance," supposes a preexisting bill, a transfer may be made previously to the bill being completed. Thus it has been adjudged, that if a man indorse his name on a blank stamped piece of paper, such an indorsement will operate as a carte blanche, or letter of credit, for an indefinite sum, consistent with the stamp, and will bind the indorser for any sum to be paid at any time, which the person to whom he intrusts the instrument chooses to insert in it, and such paper shall be considered a bill by relation from the time of signing and indors 'Jones and another v. Radford, 1 Campb. 83. cited in notes. Indorsee against acceptor of a bill of exchange, payable to two persons. The bill had been indorsed by one in the name of both, and the defendant had accepted it with the indorsement upon it. The defence was, that the payces not being partners, the bill ought to have been indorsed by both. Lord Ellenborough held, that the defendant having accepted the bill so indorsed, could not now dispute the regularity of the indorsement. Sed vide Smith v. Hunter, i T. R. 654. 2 Swann v. Steele, 7 East. 210.-Ante, 40, in notes.-Ridley v. Taylor, 13 East. 175.-Ante, 44. n. 3. Evans. Cramlington, Carth. 5.-2 Vent. 307.-Skin. 264.— Company of Felt-makers v. Davis, 1 Bos. & Pul. 101. note c.--Smith . Kendall, 6 T. R. 124.-Selw. Ni. Pri. 4th ed. 337. A bill was payable to Price or order, for the use of Calvert." Price indorsed it to Evans, after which an extent issued against Calvert, and the money due upon it was seized to the use of the king. These facts appearing upon the pleadings, two points were made upon demurrer; the one whether Calvert had such an interest in the money as might be extended, the other whether Price had power to indorse the bill, or whether he had only a bare authority to receive the money for the use of Calvert; and the Court of King's Bench, and afterwards the Exchequer Chamber, held that Calvert had not such an interest as could be extended, and that Price had power to indorse the bill, and judgment was given for the plaintiff. Russel v. Langstaff, Dougl. 514.-Newsome v. Thornton, 6 East. 21, 2.-Collis v. Emett, 1 Hen. Bla. 313. 316. 319.-Ante, 32. in notes. |